According to a survey conducted by Bangko Sentral ng Pilipinas (BSP), banks in the Philippines are expected to either uphold or enhance their loan standards for both businesses and consumers.
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The report by the Philippine Central Bank further reveals that 86.3% of banks and lending institutions maintained their loan standards for firms, as indicated by the modal approach.
However, the DI approach showed a net tightening of lending standards across borrower firm sizes, citing reasons such as the deterioration of borrowers’ profiles, profitability of bank portfolios, and lower risk tolerance among banks.
Despite this tightening trend, the BSP data suggests that the rate of tightening was slower compared to Q4 2023.
Regarding household loans, banks maintained their lending standards due to consistent risk tolerance levels, stable profitability of asset portfolios, and a steady economic outlook and borrower profile.
For real estate loans, 75% of respondents reported maintaining credit standards for housing loans in Q1, with expectations for unchanged lending standards in Q2.
Additionally, 88% of banks maintained overall credit standards for commercial real estate loans (CRELs), although there was a net tightening of credit standards based on the DI approach.
Looking ahead to Q2, a significant percentage of banks anticipate either retaining their lending standards for CRELs or tigA survey conducted by the Bangko Sentral ng Pilipinas (BSP) indicates that banks in the Philippines are poised to maintain or strengthen their loan standards for both businesses and consumers.
The report from the BSP reveals that 86.3% of banks and lending institutions upheld their loan standards for firms, according to the modal approach. However, the DI approach showed a net tightening of lending standards across various borrower firm sizes, citing factors such as deteriorating borrower profiles, portfolio profitability, and reduced risk tolerance among banks.
Despite this tightening trend, BSP data suggests that the pace of tightening was slower compared to Q4 2023.
Regarding household loans, banks maintained their lending standards due to stable risk tolerance levels, consistent profitability of asset portfolios, and a steady economic outlook and borrower profile.
In the case of real estate loans, 75% of respondents reported maintaining credit standards for housing loans in Q1, with an expectation of unchanged lending standards in Q2. Additionally, 88% of banks maintained overall credit standards for commercial real estate loans (CRELs), although there was a net tightening of credit standards based on the DI approach.
Looking ahead to Q2, a significant percentage of banks anticipate either retaining their lending standards for CRELs or further tightening loan standards.
